Biden administration plans sanctions on Russian oil tankers to curtail war funding

The Biden administration is set to impose additional sanctions targeting Russian oil tankers as part of its ongoing efforts to disrupt Russia’s financial resources amid its invasion of Ukraine.

According to sources familiar with the matter, these sanctions aim to disrupt the so-called "shadow fleet" of aging ships used by Russia to evade the West's $60 per barrel price cap on its oil exports, Caliber.Az reports, citing foreign media.

Since Russia’s invasion of Ukraine in February 2022, the U.S. and its allies have implemented various sanctions to limit Russia’s revenue from its vast oil exports. However, Moscow has found ways around these measures by rerouting its oil sales to China and India, who have agreed to purchase Russian crude at a discount, even when sold above the price cap.

The upcoming sanctions are expected to target vessels involved in shipping Russian oil priced above the cap, as well as individuals linked to the networks responsible for these transactions. The Biden administration is also exploring measures against Chinese banks that facilitate these deals, according to U.S. Treasury Secretary Janet Yellen, who hinted at further actions in a Reuters interview last month.

The sanctions package, which could be significant, is part of the U.S.’s strategy to curb Russia’s ability to fund its ongoing military actions in Ukraine. The Biden administration’s move comes as President-elect Donald Trump is set to take office on January 20, with speculation surrounding his stance on future sanctions on Russia.

In late 2022, the G7, European Union, and Australia imposed the $60 per barrel price cap, blocking the use of Western maritime services for oil shipments priced above the limit. The sanctions, which also target insurance and financing for such shipments, have placed significant pressure on Russia’s oil industry, though the country remains one of the world’s top three oil producers.

The U.S. Treasury’s Office of Foreign Assets Control has yet to comment on the upcoming sanctions.

By Khagan Isayev